While many of us are watching the results of the NCAA Basketball Tournament and witnessing the implosion and complete destruction of our brackets, others in the great wide world of the bulk transmission system, the resource adequacy colleague of spinning turbines and post-Competitive Retail Solution, have all eyes on the MISO Planning Resource Auction (PRA).
This is the time when utilities are behind closed doors immersed in the 3,000-piece jig saw puzzle of where to get their electricity for customers. The PRA is initiated during the final three business days of March and the utilities use the PRA to acquire electricity for the MISO Planning Year which is the twelve month period from June 1 to May 31.
Stakeholders and MISO work together in the process to confirm at the highest possible level the acquisition by utilities of sufficient electric capacity for their customers on the coldest and hottest days of the year. In using the best line-up and creating match-ups for success, utilities can select various fuel mixes and resources with the intent and design to achieve the lowest possible cost for customers. The line-ups and match-ups of generation resources are also designed to be available for needed surplus amounts for the Planning Reserve Margin.
During the electricity acquisition decision process by the utility, there are three options that include: generating the energy from the utility’s own assets, executing a power purchase agreement with another generating company and acquiring electricity through the annual Planning Resource Auction administered by MISO. The results of the auction are designed to establish the lowest-cost price for electric generation capacity in each of the Local Resource Zones (LRZ).
While each LRZ has a Capacity Import Limit and Capacity Export Limit designed to maintain electricity flows safely and reliably throughout the MISO transmission system, it remains paramount that each utility secure their obligations with a sufficient amount of capacity within the LRZ. MISO arrives at an amount of electricity required to be from the resources in each LRZ to serve the customers. Such amount is called the Local Clearing Requirement.
At the end of each day, MISO’s desire and efforts are to support each state’s resource requirements in an effort to send effective and efficient price signals in a fair and transparent manner to provide confidence in resource adequacy outcomes.